Colorado SecureSavings: What Employers Need to Know

As of January 1, 2023, Colorado joined a growing list of states requiring employers to sponsor a qualified retirement savings plan or to participate in a state-sponsored program. Known as the Colorado SecureSavings Program, the law requires all private-sector employers with five or more employees to comply.

The final deadline for compliance is June 30, 2023.

How does it work?

Employers can either offer a qualified retirement plan like a 401(k) or they can choose to participate in the SecureSavings – a Roth IRA-based plan that is administered by the Colorado Department of the Treasury. Employees can contribute to the program through automatic payroll deductions, and employers are not required to match employee contributions.

Eligible employees will be automatically enrolled in a Roth IRA at 5% of pay with an automatic increase of 1% each year, up to a maximum of 8%. However, employee participation is voluntary and employees may opt out, increase or decrease the contribution rate, or re-enroll at any time.

Employer tax benefits:

Federal tax credits are available to offset 100 percent of the qualified retirement plan start-up costs for eligible employers with up to 50 employees, for those who choose to sponsor a 401(k) plan. Those credits will be capped annually at $5,000 for three years (total of $15,000). 

For employers with 50-100 qualifying employees, there are similar credits available, though capped at a lower amount. And for employers with five to 25 employees, a maximum state grant of $300 will be available to those eligible.

Which employers need to register?

Employers who meet the following criteria must register for SecureSavings if they are:

• Registered as a business in the state of Colorado.
• Have been in business for two or more years.
• Employ five or more workers who have worked at least 180 days each.
• Don’t already offer a 401(k) or other qualified retirement savings plan.

Employers who already offer a qualified retirement savings plan are exempt from registering for SecureSavings.

What if I already have a qualified retirement account?

If your business already offers a qualified retirement plan, you are not required to participate in the state SecureSavings program, but you do need to certify your exemption. You just need to provide your EIN and Access code, and then certify that you already offer a qualified plan. Have more questions? See the SecureSavings Employers Help Center.

Deadlines and non-compliance:

Employers with 14 or fewer employees must register with SecureSavings by June 30, 2023. Employers with 15 or more employees are already past the registration deadline and are encouraged to register as soon as possible.

In case of noncompliance, employers may be liable to pay an annual fine of up to $100 per eligible employee per year, up to a maximum of $5,000 per year.

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